I mostly trade the RUT and IWM but just noticed the XLF trading at $10.56!!! I've been bearish but I gotta say I think I'm getting bullish on XLF. I'm looking at selling the Dec 10/6 put spread. The collected premium is around $107 with a max loss of $293. More importantly seems like buying shares of XLF at $8.93 a share seems like a no-brainer here! I don't have much experience with trading XLF so any input on this would be appreciated. Some pros and cons I see: Cons: Well its a bunch of financials. Pros: - Seems cheap at $8.93 a share because downside is only $8.93 and long term upside should be at least to $15 - $20. - Its an etf so if it goes to 0 then I've got much worse problems since most of the financial institutions won't exist. - Government bailout because I dont' think the government will let the major financials fail so I don't think XLF is going to 0. - Current dividend yield at 5.45%, but even assuming the dividend yield gets slashed to 1 or 2% still not bad. - Plus another 50% drop will take the value to 5 bucks and you can still write calls for decent amount. So I've been buying and selling puts like mad on RUT but XLF looks darn tempting here!!